Details of the New EZ Mart Lease

City Councilman, Ken Pearce, just emailed a letter to me and asked me to share it with you. It addresses the numbers behind the EZ Mart decision and the details of their new lease with the city.

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The current lease is $300 per month. This was negotiated in 1977. It was an economic development initiative by the city council at that time in an effort to lure a business to Mineola.

For the first 5 years of the modified lease, the rent increases to $1500 per month, $1750 in the next 5 years, $2000 in the third 5 years, and $2250 in the final 5 years. This is total lease revenue of $450,000 over the 20 year extension. This equates to a 500% increase in the first five years, to a 750% increase in the last five years.

Our estimates are that EZ Mart pays about $2,650 per year in water utilities, about $1,200 per year in personal property taxes currently, and if they make the additional $350,000 of improvements they said they would, another potential $1,900 of property taxes on those improvements. We do not have any way of verifying the sales tax EZ Mart pays, but my personal estimate is about $10,000 per year. So, total tax and utilility revenue to the city is about $15,750 per year. Unadjusted for inflation, this would total about $315,000 over the 20 years of the lease.

It was originally estimated that it would have cost the city about $102,500 to demolish the building, remove the gas tanks, soil & environmental mitigation, and to pave a parking lot. It was later determined that the lessee would have had the responsibility of tank removal and mitigation, but that still may have left the city having to spend $50 to $80 k to make a parking lot.

So, adding that all up, it would have left us with an $845,000 parking lot. That is the total of lost revenue and actual construction costs. That would have been a terrible financial move for the city! The council knew that, as evidenced by the 5-0 vote, with one alderman absent.

There are other alternatives to increasing parking in downtown. They include possible purchase or lease of the lot at Line and Commerce, and possible renovation of Commerce Street between Line and Johnson. Both of these options combined would cost taxpayers far less than $845,000!

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1 comment for “Details of the New EZ Mart Lease

  1. julierebek
    January 23, 2012 at 11:39 pm

    Thank you so much for sharing all of this information with the public. I was utterly appalled when I heard of the proposed plan to raze the EZ Mart. I just couldn’t understand why the City of Mineola would intentionally eliminate a business that provided 24 hour service within town and jobs for local citizens as well as (I would think) a sizeable taxable revenue. The information provided above shows that our City Council truly does work for our community and the “many” rather than the “few”. Congratulations Mineola for the newly increased revenue.

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